Earlier this week, I had the pleasure of sitting down with the Heartland Institute’s Steve Stanek for an episode of their Heartland Daily Podcast, where we discussed President Obama’s recent budget proposal to study a potential privatization of the Tennessee Valley Authority (TVA). From Heartland’s Somewhat Reasonable blog:

President Barack Obama has proposed studying the possibility of privatizing the Tennessee Valley Authority, the nation’s largest government-owned utility. Privatization expert Leonard Gilroy of The Reason Foundation tells Heartland’s Steve Stanek why the president has a good idea, and why area politicians in both major political parties oppose it.

The Chattanooga Times Free Press newspaper declared in an editorial that opposing TVA privatization is a mistake and noted the disconnect between some Tennessee politicians who declare they favor free enterprise and limited government yet oppose privatization.

“The only real argument for keeping the TVA’s assets in government hands are weak arguments like, ‘people like the TVA how it is’ and ‘that’s how we’ve always done it.’ Sadly, that stale mindset has overtaken area Republican lawmakers who claim to oppose government control and socialist programs,” the newspaper’s editors wrote. […]

Privatization expert Leonard Gilroy of Reason Foundation said he sees lots of institutional opposition to privatization.

“Despite being an utterly nonessential federal asset, there appears to be no political will in Congress whatsoever to authorize a TVA privatization,” he said. “Senator Alexander, Senator [Bob] Corker (R) and other Tennessee congressmen of both political parties have already condemned the proposal to merely study privatization, which is all the President has proposed. This just goes to show how difficult it is in real life to shut down government agencies and enterprises once they spring to life and build constituencies.”

Nonetheless, he said privatization ought to be studied.

“There’s nothing inherently governmental about running a power business, so privatization could provide an opportunity to bring in a businesslike approach and more efficient operations and management compared to what’s seen today as a government-owned enterprise,” he said. “However, there would be some very thorny implementation issues to work out, not the least of which being how to handle the divestiture of the TVA land and power assets that were originally seized from private hands to begin with.”